May 16, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Care Group, Inc.
Definitive Proxy Materials
Gentlemen:
The following documents are being filed electronically on the
EDGAR system on behalf of The Care Group, Inc.:
1. Definitive Proxy Statement;
2. Proxy Card; and
3. 1995 Stock Option Plan.
The Care Group, Inc. intends to release the definitive proxy
material to shareholders on or about May 19, 1995.
Very truly yours,
/s/ Michael Harvey
Michael Harvey
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. 1)
(X) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to S240.14 a-11(c) or S240 14 a-12
The Care Group,Inc.
(Name of Registrant as Specified In Its Charter)
_______________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
( ) $125 per Exchange Act Rules 0-11 (c)(1)(ii), 14a-6(i)(l), or
14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14(a)-6(i)(3)
( ) Fee computed on table below per Exchange Act Rules 14a-
6(I)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
_______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
_______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
1 Set forth the amount on which the filing fee is calculated and state
how it was determined.
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
1) Amount Previously Paid
_______________________________________________________________________
2) Form, Schedule or Registration Statement No.
_______________________________________________________________________
3) Filing Party
_______________________________________________________________________
THE CARE GROUP, INC.
1 HOLLOW LANE, SUITE 110
LAKE SUCCESS, NY 11042
_____________________________
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
__________________________
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of The Care Group, Inc. (the
"Company") will be held on Wednesday, June 21, 1995 at 10:30 A.M., local
time, at the Roslyn Claremont Hotel, 1121 Old Northern Boulevard,
Roslyn, New York, 11576 for the following purposes, all as more fully
described in the accompanying Proxy Statement:
(1) To amend the Company's Certificate of Incorporation to
provide for directors to be divided into three classes, with each class
to be elected once every three years.
(2) To elect five (5) directors of the Company, one for a period
of one year, two for a period of two years and two for a period of three
years.
(3) To amend the Company's Certificate of Incorporation with
respect tot the Company's authorized but unissued preferred stock.
(4) To ratify the selection of Deloitte & Touche LLP as
independent public accountants for the Company for the fiscal year
ending December 31, 1995; and
(5) To approve the Company's 1995 Stock Option Plan.
The Board of Directors has fixed the close of business on April
26, 1995 as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
RANDOLPH J. MITTACH
SECRETARY AND TREASURER
NEW YORK, NEW YORK
APRIL 26, 1995
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU
EXPECT TO ATTEND IN PERSON. STOCKHOLDERS WHO ATTEND THE MEETING MAY
REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY DESIRE.
-1-
THE CARE GROUP, INC.
1 HOLLOW LANE, SUITE 110
LAKE SUCCESS, NY 11042
_____________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 1995
_____________________
INTRODUCTION
This Proxy Statement is furnished to the stockholders of The Care Group,
Inc., a Delaware corporation (the "Company"), in connection with a
solicitation of proxies by the Board of Directors of the Company (the
"Board of Directors") for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held on June 21, 1995 at 10:30 A.M., local time,
at the Roslyn Claremont Hotel, 1221 Old Northern Boulevard, Roslyn, New
York 11576, for the purposes set forth in the accompanying Notice of
Meeting. This Proxy Statement is first being mailed to the Company's
stockholders on or about May 18, 1995.
Only stockholders of record at the close of business on April 26, 1995
will be entitled to notice of and to vote at the Annual Meeting. At
such date the outstanding voting securities of the Company consisted of
8,390,015 shares of common stock, $.001 par value per share (the "Common
Stock"), each share of Common Stock being entitled to one vote with
respect to each of the proposals to be voted at the Annual Meeting. To
transact any business at the Annual Meeting, a quorum (a majority of the
total number of outstanding shares of Common Stock entitled to be voted
thereat) must be present or represented by proxy.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by either (i) giving written notice to the
Company bearing a later date than the proxy, (ii) by submission of a
later dated proxy, or (iii) by voting in person at the Annual Meeting.
The shares of Common Stock represented by all properly executed proxies
received in time for the Annual Meeting will be voted in accordance with
any specification made thereon, and if no specification is made thereon
will be voted (i) FOR the proposal to amend the Company's Certification
of Incorporation with respect to the Board of Directors, (ii) FOR the
elections of each of the nominees for directors named herein, (iii) FOR
the proposal to amend the Company's Certificate of Incorporation with
respect to the Company's Preferred Stock, (iv) FOR the ratification of
the selection by the Company's Board of Directors of Deloitte & Touche
LLP as the Company's independent public accountants for the year ending
December 31, 1995 and (v) FOR the approval of the 1995 Stock Option
Plan.
The Company's officers and directors hold 27.94% of the total number of
shares of Common Stock that are entitled to vote at the Annual Meeting.
The officers and directors intend to vote their shares FOR each proposal
set forth in this proxy statement.
PROPOSAL 1
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION WITH
RESPECT TO
THE BOARD OF DIRECTORS
The Board of Directors has recommended that in order to provide for
continuity for the Company in future years, the Company's Certificate of
Incorporation should be amended to provide for three classes of
directors for the Company. The members of each class are to be elected
once every three years for a term of three years and until their
successors are elected and shall have qualified. Each class will
consist of the same number of directors, except that if there are an odd
number of directors, Class III shall consist of one fewer director than
the other two classes. Under Article ELEVENTH of the Certificate of
Incorporation, the Board of Directors shall consist of at least three
and not more than seven individuals.
Assuming that the Board of Directors consists of five individuals (as
the Board currently does), adoption of this amendment means (i) that at
future annual meetings of the Company either one or two rather than five
directors will be elected each year for terms of three years rather than
one year, (ii) that in the event of future vacancies on the Board of
Directors, the remaining directors may elect a replacement director and
such a replacement director will be of the same class as the director
replaced, and (iii) that it may be more difficult for a person or group
to acquire control of the Company in a contested transaction. Adoption
of this amendment will also make it more difficult to remove the
Company's management. Therefore passage of the amendment may enhance
the ability of the Company's officers and directors to maintain their
respective positions with the Company. The Company is currently not
aware of any attempt by any person or group to take over the Company.
The amendment provides that it cannot be changed without the affirmative
vote of the holders of at least two-thirds of the shares of Common Stock
present at the meeting in person or represented by proxy. This two-
thirds voting requirement will make it more difficult to change the
amendment and accordingly more difficult to eliminate or alter the
separate classes of directors. Therefore, this two-thirds voting
requirement may increase the difficulty for a person or group to remove
directors and thus acquire control of the Company in a contested
transaction.
At the Annual Meeting for this year, (i) if this amendment is adopted
all five directors will be elected, one for one year, two for two years
and two for three years, and (ii) if this amendment is not adopted all
five directors will be elected to a term at the next annual meeting and
until their successors are elected and shall have qualified.
The full text of the proposed amendment to the Company's Certificate of
Incorporation with respect to the election of directors appears as
Exhibit 1 to this Proxy Statement. Passage of this proposal requires
the approval of a majority of the issued and outstanding shares of
Common Stock present in person or represented by proxy voted at the
Annual Meeting (abstentions will be counted as being present and will be
deemed a vote against the proposal; broker non-votes will not be counted
as present for this proposal and will not affect the outcome of the
vote).
PROPOSAL 2
ELECTION OF DIRECTORS
A Board of five directors is to be elected at the Annual Meeting. The
nominees designated as Class I, II and III shall serve until the Annual
Meetings in 1998, 1997 and 1996, respectively, and thereafter until his
or her successor shall have been elected and shall qualify.
Ann T. Mittasch and Randolph J. Mittasch are designated as Class I
directors for three years expiring at the Annual Meeting in calendar
year 1998 and until their successors are elected and shall have
qualified. Gilda G. Schechter and John J. Lynch are designated Class II
directors for the two year term expiring at the Annual Meeting in
calendar year 1997 and until their successors are elected and shall have
qualified. Dr. Alex Maurillo is designated as the Class III director
for the one year term expiring at the Annual Meeting in the calendar
year 1996 and until his successor is elected and shall have qualified.
If proposal 1 set forth in this Proxy Statement is not adopted, then
each nominee will serve until the next annual meeting of stockholders
and thereafter until his or her successor shall have been elected and
shall qualify.
In order to be elected as a member of the Board of Directors, a nominee
must receive a plurality of the outstanding votes present in person or
represented by proxy at the Annual Meeting (abstentions and broker non-
votes will be disregarded and will have no effect on the outcome of the
vote).
Set forth on the following page are the names and ages of the nominees,
their positions with the Company, if any, and their principal
occupations at present and during the past five years. The terms of
each of the nominees will expire upon the election and qualification of
the new directors. Each of the nominees has advised the Company that he
or she will serve if elected. The persons named in the enclosed proxy
intend, unless such authority is withheld, to vote for the election as
directors of the nominees named below. The Company does not expect that
any of the nominees will be available for the election, but if that
should occur before the Annual Meeting, the proxies will be voted for a
substitute nominee who will be recommended by the Board of Directors.
During 1994, there were a total of five (5) meetings of the Board of
Directors. The Board of Directors has an Audit Committee consisting of
John Lynch and Dr. Alex Maurillo. The purpose of the Audit Committee is
to review the Company's financial condition and the qualifications of
the Company's independent accountants to serve as auditors. During
1994, there were a total of two (2) meetings of the Audit Committee.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information relating to the current
directors (who consist of all the nominees for directors for the 1995
Annual Meeting) and executive officers of the Company.
NAME POSITION WITH THE COMPANY
Ann T. Mittasch President, Chief Executive Officer
Chairman of the Board
Gilda G. Schechter Executive Vice President, Director
Randolph J. Mittasch Secretary/Treasurer, Director
Dr. Alex Maurillo Director
John J. Lynch Director
Anthony J. Esposito, Jr. Vice President of the Company's
subsidiaries
Pat H. Celli Chief Financial Officer,
Assistant Secretary and
Assistant Treasurer
ANN T. MITTASCH, PRESIDENT, CHAIRMAN OF THE BOARD OF DIRECTORS: (Age
65): Mrs. Mittasch has been President and Chairman of the Company since
1984. Prior to 1984, Mrs. Mittasch served as President and then Chairman
of Superior Care, Inc. (predecessor to Lifetime Corporation), a national
home care corporation whose securities traded on the New York Stock
Exchange, Inc. Mrs. Mittasch is the mother of Randolph J. Mittasch,
Secretary/Treasurer and a director of the Company.
GILDA G. SCHECHTER, EXECUTIVE VICE PRESIDENT AND DIRECTOR: (Age 63):
Ms. Schechter has been Executive Vice President and a director of the
Company since 1985.
RANDOLPH J. MITTASCH, SECRETARY/TREASURER: (Age 33): Mr. Mittasch has
been Secretary/Treasurer of the Company since February, 1989 and has
been a director of the Company since 1985. From 1988 to February, 1992,
he was employed by the American Stock Exchange, Inc. as a Senior
Accountant. Mr. Mittasch received an MBA from Adelphi University in
1987 and in 1989 became a Certified Public Accountant. Mr. Mittasch is
the son of Ann T. Mittasch, President and Chairman of the Board of the
Company.
JOHN J. LYNCH, DIRECTOR: (Age 71): Mr. Lynch has been a consultant for
special projects from February, 1988 to the present. From November 1,
1989 to May 1, 1990, Mr. Lynch served as pro-bono health arbitrator for
the New York State Mediation Board. Mr. Lynch has been a director of
the Company since 1990 and he is not an officer of the Company.
Alex Maurillo, M.D., Director: (Age 66): Dr. Alex Maurillo has been a
General Surgeon at St. Clares Hospital since 1962. He is currently on
the Board of Directors of the Central Labor Council of New York City and
a Medical Coordinator of the Workman's Compensation Board & Self
Insurance Fund of Local 3 of the Electrical Union of New York. Dr.
Maurillo has been a director of the Company since 1992 and he is not an
officer of the Company.
ANTHONY J. ESPOSITO, JR., VICE PRESIDENT OF THE COMPANY'S HOME CARE
SUBSIDIARIES: (Age 47): Mr. Esposito has been serving as Vice President
of the Company's subsidiaries providing home care services since the
later of 1985 or their formation.
PAT H. CELLI, ASSISTANT TREASURER, ASSISTANT SECRETARY AND CHIEF
FINANCIAL OFFICER: (Age 42): Mr. Celli has been Chief Financial
Officer of the Company since 1990.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of the
Company's Common Stock beneficially owned (calculated in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934) as of April 4,
1995 or such other date as indicated below by (i) owners of more than 5%
of the Company's outstanding Common Stock, (ii) all directors and
director nominees of the Company, (iii) the named executive officers
referred to in the "Executive Compensation" section of this report and
(iv) all officers and directors of the Company as a group:
NAME OF NUMBER OF SHARES PERCENTAGE OF
BENEFICIAL OWNER BENEFICIALLY OWNED TOTAL SHARES
Ann T. Mittasch (1) 1,297,000 15.25%
1 Hollow Lane
Lake Success, NY 11042
Gilda G. Schechter (2) 265,500 3.16%
1 Hollow Lane
Lake Success, NY 11042
Randolph J. Mittasch (3) 190,300 2.26%
John L. Lynch (4) 3,250 *
Dr. Alex Maurillo (5) 2,000 *
Anthony J. Esposito, Jr. (6) 90,000 1.07%
C.G. Holding of New York, Inc. (7) 981,206 11.69%
1979 Marcus Avenue
Lake Success, NY 11042
The Care Group, Inc. 981,206 11.69%
Board of Directors (8)
1 Hollow Lane
Lake Success, NY 11042
Pat Celli (9) 63,000 *
All officers and directors as a group
(total of 7 persons) (10) 2,752,256 31.79%
*Less than 1%
(1) Mrs. Mittasch, Chairman and President of the Company, directly
owns 900,000 shares of Common Stock for her own account and may be
deemed to beneficially own an additional 280,000 shares of Common Stock
subject to a voting trust (the "Voting Trust") expiring February 27,
1999 of which she is the sole voting trustee with respect to 140,000
shares of Common Stock directly owned by Randolph J. Mittasch, and an
additional 140,000 shares directly owned by five other persons. Mrs.
Mittasch also holds options as of April 4, 1995 totaling 117,000 shares
an average exercise price of $4.46 that expire February 27, 1999. Mrs.
Mittasch disclaims beneficial ownership of the 981,206 shares of Common
Stock beneficially owned by the Company's Board of Directors (See (7)).
(2) Gilda G. Schecter, Executive Vice President and a director of the
Company, directly owns 260,000 shares of Common Stock for her own
account. The shares beneficially owned by Ms. Schechter as of April 4,
1995 include options expiring February 27, 1999 to acquire 5,500 shares
of Common Stock at an average exercise price $5.13. Ms. Schechter
disclaims beneficial ownership of the 981,206 shares of Common Stock
beneficially owned by the Company's Board of Directors (See (7)).
(3) Randolph J. Mittasch directly owns 142,800 shares of Common Stock
as of April 4, 1995, 140,000 of which shares are subject to the Voting
Trust. Mr. Mittasch also holds options expiring February 27, 1999 to
acquire 47,500 shares of Common Stock at an average exercise price of
$4.50. Randolph J. Mittasch disclaims beneficial ownership of the
shares of Common Stock owned by Ann T. Mittasch, except for his 140,000
shares that are subject to the Voting Trust. Randolph J. Mittasch
disclaims beneficial ownership of the 981,206 shares of Common Stock
beneficially owned by the Company's Board of Directors (See (7)).
(4) John J. Lynch has options expiring February 27, 1999 to acquire
3,250 shares of Common Stock at an average exercise price of $3.00.
John J. Lynch disclaims beneficial ownership of the 981,206 shares of
Common Stock beneficially owned by the Company's Board of Directors (See
(7)).
(5) Dr. Alex Maurillo has options expiring February 27, 1999 to
acquire 2,000 shares of Common Stock at an average exercise price of
$3.38. Dr. Alex Maurillo disclaims beneficial ownership of the 981,206
shares of Common Stock beneficially owned by the Company's Board of
Directors (See (7)).
(6) Anthony Esposito, Jr. directly owns 60,000 shares of Common Stock
and has options expiring February 27, 1999 to acquire 30,000 shares of
Common Stock at an average exercise price of $4.13.
(7) The 981,206 shares beneficially owned by C.G. Holdings of New
York, Inc. are subject to a voting trust terminating in December 1995
pursuant to which the Board of Directors of the Company, as the voting
trustee, has exclusive voting power (and accordingly beneficial
ownership) over such shares during the term of the voting trust. Also,
during the term of the voting trust, C.G. Holdings of New York, Inc. has
certain limited rights to transfer the shares, provided that the shares
will remain in the voting trust upon transfer. The individual members
of the Board of Directors each disclaims beneficial ownership of the
981,206 shares.
(8) The shares beneficially owned by C. G. Holdings of New York, Inc.,
may be deemed to be beneficially owned by Jordan Belfort and Daniel
Porusch whose addresses are 1979 Marcus Avenue, Lake Success, NY 11042.
(9) Pat Celli has options expiring February 27, 1999 to acquire 63,000
shares of Common Stock at an average exercise price of $4.75.
(10) Includes options held by all officers and directors of the Company
to acquire a total of 268,250 shares of Common Stock and the 981,206
shares placed in the voting trust referred to in Note 7.
EXECUTIVE COMPENSATION
The following table contains information with respect to all
compensation paid to each of the executive officers of the Company whose
total compensation exceeded $100,000 in all capacities to the Company
during the fiscal year ended December 31, 1994.
<TABLE>
SUMMARY COMPENSATION TABLE (1)
<CAPTION>
ANNUAL COMPENSATION
(a) (b) (c)
Name and
Principal Position Year Salary ($)
<S> <C> <C>
Ann Mittasch 1994 197,877
Chairman of the Board 1993 172,154
President, Chief 1992 152,885
Executive Officer
Anthony J. Esposito, Jr. 1994 122,430
V.P. of Company's 1993 116,048
Subsidiaries 1992 103,488
Pat H. Celli 1994 107,808
Chief Financial Officer 1993 95,000
Assistant Secretary & 1992 90,865
Assistant Treasurer
SUMMARY COMPENSATION TABLE (1)
<CAPTION>
ANNUAL COMPENSATION LONG TERM
COMPENSATION
Award
(a) (d) (g)
Name and Securities Underlying
Principal Position Bonus ($) Options/SAR's (#) (2)
<S> <C> <C>
Ann Mittasch 7,630 -0-
Chairman of the Board 3,317 40,000
President, Chief 27,885 75,000
Executive Officer
Anthony J. Esposito, Jr. 1,500 -0-
V.P. of Company's 2,354 -0-
Subsidiaries 12,047 10,000
Pat H. Celli 5,750 -0-
Chief Financial Officer 1,827 30,000
Assistant Secretary & 1,827 70,000
Assistant Treasurer
</TABLE>
(1) Certain columns have not been included in this table because the
information called for therein is not applicable to the Company or the
individuals named above for the periods indicated.
(2) Only stock options have been granted; no SARs have been granted.
Each Stock Option is exercisable to purchase one share of Common Stock
at an exercise price equal to the market value of the Common Stock on
the date that the option is granted.
<TABLE>
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<CAPTION>
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Options Options
/SARs at FY /SARs at FY
-End (#) -End ($)
Shares Exercisable/ Exercisable/
Acquired on Value Unexercisable Unexercisable
Name Exercise (#) Realized ($) (1) (1)
ANN MITTASCH 95,000 $101,548 132,000(1) $198,000(1)
PRESIDENT, CHIEF
EXECUTIVE OFFICER
PAT CELLI 52,000 $34,232 48,000(1) $82,260(1)
CHIEF FINANCIAL
OFFICER
ASSISTANT SECRETARY
& ASSISTANT TREASURER
ANTHONY J. ESPOSITO, JR.
V.P. OF COMPANY'S
SUBSIDARIES 0 0 30,000(1) $0.00
</TABLE>
(1) All stock options reflected in columns (d) and (e) are presently
exercisable.
PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Company include
in this report a line-graph presentation comparing cumulative, five year
stockholder returns on an indexed basis with a broad equity market index
and a published industry or line of business index, or an index of peer
companies selected by the Company. The Board of Directors has approved
the use of the Wilshire Index as the broad equity market index and the
Wilshire Index of Health Care Providers as its published industry index.
The table below compares the cumulative total return as of the end of
each of the Company's last five fiscal years on $100 invested as of
December 31, 1989 in the Common Stock of the Company, the Index of
Health Care Providers and the Wilshire 5000 index assuming the
reinvestment of all dividends (the Company has not paid any dividends):
THE CARE GROUP, INC.
FIVE YEAR CUMULATIVE RETURNS
1989 1990 1991
PEER GROUP $100 $121 $235
CARE GROUP 100 100 127
WILSHIRE 5000 100 94 126
THE CARE GROUP, INC.
FIVE YEAR CUMULATIVE RETURNS
1992 1993 1994
PEER GROUP $215 $168 $221
CARE GROUP 59 66 75
WILSHIRE 5000 137 153 153
401 (K) PLAN
In 1992, the Company adopted a defined contribution plan under section
401(k) of the Internal Revenue Code of 1986 to begin operation in 1993.
A substantial portion of the employees of the Company and its
subsidiaries are entitled to participate in this plan. The Company
currently has no other deferred compensation plans. Except as described
herein, the Company has no current plans relating to bonuses and awards
that may be granted to management, although the Company reserves the
right in the future to grant such other bonuses or awards.
EMPLOYMENT AGREEMENTS
Ann T. Mittasch, President and Chairman of the Company, entered into an
employment agreement with the Company pursuant to which she agreed to
serve the Company on a full-time basis. Her employment agreement runs
from January 1, 1992 and ends December 31, 1996. Under this agreement,
her base salary is $228,131 for 1995 with annual increases of 15%.
Bonuses, awards and other benefits may be granted to Mrs. Mittasch on a
periodic basis by the Board of Directors, including the right to
participate in group life insurance, medical and retirement plans, if
any. The employment agreement also contains non-competition and other
covenants.
DIRECTOR COMPENSATION
Ann Mittasch, Gilda Schechter and Randolph Mittasch, who serve as
both directors and officers of the Company, do not receive compensation
for serving as directors. Mr. John Lynch and Dr. Alex Maurillo, who are
the Company's two independent directors, receive $250 for each Board of
Directors meeting they attend as compensation for serving as directors.
1990, 1991 AND 1993 STOCK OPTION PLANS
The Company's currently operative Stock Option Plans consist of the 1990
Stock Option Plan (the "1990 Plan"), the 1991 Stock Option Plan (the
"1991 Plan") and the 1993 Stock Option Plan (the "1993 Plan") (the 1990
Plan, the 1991 Plan, and the 1993 Plan are sometimes collectively
referred to herein as the "Plans"). Under the Plans, a total of
1,025,000 shares of Common Stock have been reserved for issuance to
officers, directors, key employees and consultants who are not employees
of the Company. As of December 31, 1994, options to purchase a total of
23,000 shares and 674,250 shares of Common Stock have been granted under
the 1990 Plan and the 1991/1993 Plans, respectively. Options to
purchase 450,000 shares of Common Stock have been granted to the
executive officers and directors of the Company as a group. The options
granted under the 1990 Plan, and the 1991/1993 Plans as of December 31,
1994 were granted at an average exercise price of $5.17 and $2.68,
respectively (although such terms are subject to modification by the
Board of Directors). Each Plan operates similarly. All Plans permit the
issuance of both options that qualify for treatment as "incentive stock
options" ("ISOs") under Section 422 of the Internal Revenue Code of 1986
("Section 422") and non-statutory options.
The Company has approved the 1995 Stock Option Plan and is
submitting the 1995 Plan for approval at the Annual Meeting; see
"PROPOSAL 5 ( Approval of the 1995 Stock Option Plan."
1991 STOCK INCENTIVE PLAN
Effective July 1, 1991, the Company established the 1991 Stock Incentive
Plan (the "Stock Plan") pursuant to which the Board of Directors may
from time to time award up to 50,000 shares of Common Stock under the
Stock Plan.
As of December 31, 1994, the Company issued a total of 4,350 shares of
Common Stock under the Stock Plan to 18 employees of the Company in
consideration for their services to the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions on compensation of the Company's executives are generally made
by the Board of Directors in accordance with the General Corporation Law
of the State of Delaware. Ann T. Mittasch, Gilda G. Schechter and
Randolph T. Mittasch, who are three of the five members of the Board of
Directors, are also officers and employees of the Company. Ann T.
Mittasch did not participate in any discussions or decisions of the
Board regarding her salary, bonus or option grants received by her
during fiscal 1994.
BOARD COMPENSATION COMMITTEE REPORT
COMPENSATION POLICES TOWARD EXECUTIVE OFFICERS
The Board of Directors' compensation policies are designed to provide
competitive levels of compensation that relate to the Company's annual
and long-term performance goals, reward above-average corporate
performance, recognize individual initiative and achievements, and
assist the Company in attracting and retaining qualified executives.
Target levels of the executive officers' overall compensation are
intended to be consistent with others within the Company's peer group in
the home healthcare and healthcare services industry. The Company
generally targets the low to mid-range of compensation paid by the peer
group companies for comparison, although the Company reserves the right
to change policies based on the Company's growth and performance. As a
result of the implementation of these policies, the Company's executives
may be paid more or less than the executives of the Company's
competitors in any particular year.
The Board of Directors also believes that stock ownership by management
and stock-based performance compensation arrangements are beneficial in
aligning management's and stockholders' interests in the enhancement of
stockholder value. Thus, the Board of Directors has also increasingly
utilized the grant of stock options in the Company's compensation
package for its executive officers.
The Board of Directors does not have a separate compensation committee.
See "Executive Compensation ( Compensation Committee Interlocks and
Issuer Participation."
FISCAL 1994 BONUS AWARDS
Executive performance bonus opportunities are based on objective
and subjective performance criteria such as contribution to the
Company's revenue and the potential for long-term expansion and growth
in revenues and earnings (of which there can be no assurance).
Performance criteria vary each year depending on the Company's changing
and evolving issues, challenges and goals. Performance criteria can
include consummation of proposed transactions, successfuly completion of
financing, increases in revenues and earnings and attainment of other
goals such as commencement of new subsidiaries or areas of business.
Performance criteria were generally met in 1994 in light of the
increase in the Company's earnings and revenue, completion of two
acquisitions and the formation of a new pharmaceutical mail order
subsidiary.
MRS. MITTASCH FISCAL 1994 COMPENSATION
Regulations of the Securities and Exchange Commission require the Board
of Directors to disclose the Board's basis for compensation reported for
Mrs. Mittasch in fiscal 1994 and to discuss the relationship between the
Company's performance during the last fiscal year and Mrs. Mittasch's
compensation. Mrs. Mittasch's base salary was based on her employment
agreement entered into with the Company in February, 1992.
Mrs. Mittasch's bonus was determined by the Board of Directors and was
based on her significant contributions toward the Company's performance
during 1994, including increased revenue and earnings (and, in
particular, her efforts at continuing to reduce cost of revenues),
increased working capital, completion of two acquisitions and formation
of a new pharmaceutical mail order subsidiary.
SUBMITTED BY THE COMPANY'S BOARD OF DIRECTORS
Ann T. Mittasch Gilda G. Schechter Randolph J. Mittasch
John J. Lynch Dr. Alex Maurillo
PROPOSAL 3
AMENDMENT TO THE COMPANY'S CERTIFICATE
OF INCORPORATION WITH RESPECT TO THE
COMPANY'S PREFERRED STOCK
Article FOURTH of the Company's Certificate of Incorporation authorizes
the Company to issue up to one million shares of Preferred Stock, par
value $.001 per share. Article FOURTH also authorized the Board of
Directors to determine the designations, powers, preferences and terms
of the Preferred Stock. There are currently no outstanding shares of
Preferred Stock.
The Board of Directors proposes to amend the provision of Article FOURTH
to clarify the Board's broad latitude in establishing the designations,
powers, rights and preferences (collectively, "terms") of the Preferred
Stock. The Certificate of Incorporation currently permits the Board of
Directors to establish the terms of the Preferred Stock. In particular,
the current provision in the Certificate of Incorporation permitting the
Board of Directors to establish the terms of the Preferred Stock reads
as follows:
"The Preferred Stock is to be issued in one or more series as determined
by the Corporation's Board of Directors in which the designations,
powers, preferences, justifications, limitations, restrictions and
relative, optional, conversion and other special rights of the shares of
Preferred Stock contained in each such series shall be as fixed by the
Board of Directors of the Corporation (authority to do so being hereby
expressly granted) and stated and expressed in a resolution or
resolutions for the issuance of the shares of Preferred Stock contained
in such series."
The proposed amendment, which is set forth in full on Exhibit II of this
Proxy Statement, enumerates with greater detail, specificity and
comprehensiveness the terms of the Preferred Stock that the Board of
Directors is authorized to determine. For example, the proposed
amendment specifies that the Board of Directors is authorized to
determine voting, liquidation, dividend and redemption rights and
conversion privileges of the Preferred Stock, which are not expressly
enumerated in the current provision. The purpose of the greater
specificity is to remove possible ambiguities as to whether certain
terms of the Preferred Stock are in fact subject to determination by the
Board under Delaware corporate law.
No financings using the Preferred Stock are currently contemplated.
Preferred Stock whose terms can be established by the Board of Directors
might make it more difficult for a person or group to acquire the
Company in a contested transaction.
Passage of this proposal requires the approval of a majority of the
issued and outstanding shares of Common Stock present in person or
represented by proxy at the annual meeting (abstentions will be counted
as being present and will be deemed a vote against the proposal; broker
non-votes will not be counted as present for this proposal and will not
affect the outcome of the vote).
PROPOSAL 4
RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Deloitte & Touche LLP
to act as the independent public accounts to audit and report on the
financial statements of the Company for the year ending December 31,
1995, subject to the right of the Board of Directors to replace this
firm. This selection, subject to the Board's aforementioned right of
replacement, is being submitted for ratification by stockholders and, to
be effective, must be approved by the holders of a majority of the
issued and outstanding shares of the Company's voting stock present in
person or represented by proxy at the Annual Meeting (abstentions will
be counted as an "against" vote and broker non-votes will be disregarded
and will have no outcome on the vote).
A representative of Deloitte & Touche LLP is expected to be present at
the Annual Meeting with an opportunity to make a statement if he desires
to do so, and is expected to be available to respond to appropriate
questions.
On September 19, 1994, the Company, at the recommendations of its Board
of Directors, replaced Geschwind, Davidson & Company ("GDC") as the
Company's independent accountants and appointed Deloitte & Touche LLP as
the new independent auditors. GDC's reports on the financial statements
of the Company for the years ended December 31, 1992 and 1993 contained
no adverse opinions or disclaimers of opinions and were not otherwise
qualified or modified as to uncertainty, audit scope or accounting
principles.
During the years ended on December 31, 1992 and 1993 and the subsequent
interim period preceding GDC's replacement (the "Prior Period"), there
were no disagreements between the Company and GDC on any matter of
accounting principles or practices, financial statements disclosure or
auditing scope or procedure. No events of the kind described in
paragraphs (A) through (D) of Section (a)(1)(v) of SEC Rule SK, item
304, occurred with respected to the Company during the Prior Period.
THE BOARD RECOMMENDS APPROVAL OF THIS PROPOSAL.
PROPOSAL 5
APPROVAL OF THE 1995 STOCK OPTION PLAN
The Company's Board of Directors has approved the Company's 1995 Stock
Option Plan (the "1995 Plan"). The 1995 Plan provides that the Company
may grant up to 1,000,000 options, where each option is exercisable to
purchase one share of Common Stock as described below. The 1995 Plan
permits the issuance thereunder of options that qualify for treatment as
"incentive stock options" ("ISOs") under Section 422 ("Section 422") of
the Internal Revenue Code of 1986, as amended (the "Code"), as well as
non-statutory options.
Passage of this proposal requires the approval of the holders of a
majority of the issued and outstanding shares of Common Stock present in
person or represented by proxy at the Annual Meeting (abstentions will
be counted as being present and will be deemed a vote against the
proposal; broker non-votes will not be counted as present for this
proposal and will not affect the outcome of the vote).
THE BOARD RECOMMENDS ADOPTION OF THE PLAN
DESCRIPTION OF THE PLAN
(a) Stock Subject to Options. The 1995 Plan provides that an
aggregate of 1,000,000 shares of Common Stock may be granted to
officers, directors and certain employees of the Company or its
subsidiaries, currently consisting of approximately 180 individuals, and
to consultants, advisers or affiliates who are not employees of the
Company or the Company's subsidiaries. Each option to be granted under
the 1995 Plan will be exercisable to purchase one share of Common Stock,
subject to appropriate adjustment in the event of corporate
recapitalization, reorganization or similar transactions.
(b) Administration. The 1995 Plan will be administered by the
Company's Board of Directors. The Board of Directors reserves the right
to select a separate committee to administer the 1995 Plan. The Board
of Directors has the authority to determine, among other things, the
persons to whom options will be granted (subject to certain eligibility
requirements for grants of ISOs), whether the optionee will receive ISOs
or non-statutory options, the exercise price of non-statutory options
(subject to restrictions discussed below) and the time or times at which
options will be granted.
(c) Consideration. Options under the 1995 Plan can be exercised only
for cash.
(d) ISO Price. The exercise price per share of ISOs granted under the
1995 Plan cannot be less than the fair market value of the Common Stock
on the date of grant, or, in the case of ISOs granted to persons holding
more than ten percent of the total combined voting power of all classes
of stock of the Company ("Significant Stockholder"), 110% of the fair
market value of he Common Stock on the date of the grant.
(e) Non-Statutory Option Price. Non-Statutory stock options are
exercisable at a price equal to at least 90% of the fair market value of
the Company's Common Stock at the date of grant, subject to the right of
the Board of Directors to modify the terms of options as described
below.
(f) Allocation of Plan Benefits. The benefits under the 1995 Plan
that will be received, or that would have been received for the fiscal
year ended December 31, 1994 had the 1995 Plan then been in effect, by
the Company's executive officers, directors, employees or other eligible
participants is not determinable.
(g) Market Value of the Securities Underlying Options. No options
have been granted under the 1995 Plan. Assuming that all 1,000,000
options under the 1995 Plan are granted, the aggregate market value of
the shares of Common Stock underlying such options as of April 4, 1995
would equal $4,560,000.
(h) Option Duration. The 1995 Plan requires that each option shall
expire on December 31, 2004. However, in the case of any ISO granted to
a Significant Stockholder, such ISO shall expire on the date specified
by the Board of Directors but not more than five years from its date of
grant.
(i) Exercise of Options and Payment of Stock Repurchases. Each option
granted under the 1995 Plan shall be fully exercisable at the time of
grant. The Company reserves the right to purchase outstanding options
issued under the 1995 Plan for $.10 per option in the event of the
consummation of certain mergers or consolidations involving the Company
or the sale of 50% or more of the Company's assets.
(j) Non-Assignability of Options. No assignment or transfers of
options are permitted without the Company's prior consent. No ISO
optionee can assign or transfer any shares of Common Stock issued
thereunder until the expiration of both (i) two years after the date of
grant of the ISO and (ii) one year after the optionee acquires such
shares.
(k) Early Termination of Options. Sixty days after an individual's
employment or affiliation with the Company terminates, any options under
the 1995 Plan granted to such individual will terminate.
(l) Amendment, Suspension and Termination of the Plan. The Board of
Directors may amend the 1995 Plan in any respect at any time, except
that if any amendment shall adversely affect any optionee or require
stockholder vote, such amendment must be consented to in writing by such
optionee or approved by the Company's stockholders, as the case may be.
(m) Modification of Options. The Board of Directors may either modify
the terms of any options after they are granted or terminate and re-
issue any options.
(n) Registration of the Plan. The Company intends to register the
options and the shares of Common Stock underlying the options under the
Securities Act of 1933, as amended, as soon as practical after the
Annual Meeting.
FEDERAL INCOME TAX CONSEQUENCES
(a) Incentive Stock Options. The following general rules are
applicable for Federal Income Tax purposes under existing law to
employees who receive ISOs under the 1995 Plan.
1. No taxable income results to the optionee upon the grant of
an ISO or upon the issuance of shares to him upon exercise of the ISO
except as provided in applicable sections of the Internal Revenue Code
of 1986, as amended, dealing with alternative minimum taxable income.
2. No tax deduction is allowed to the Company upon either grant
or exercise of an ISO.
3. If shares acquired upon exercise of an ISO are not disposed
of prior to the later of (i) two years following the date the option was
granted or (ii) one year following the date the shares are transferred
to the optionee pursuant to the exercise of the option, the difference
between the amount realized on any subsequent disposition of the shares
and the exercise price will be treated as capital gain or loss to the
optionee.
4. If shares acquired upon exercise of an ISO are disposed of
before the expiration of one or both of the requisite holding periods (a
"disqualifying disposition"), then in most cases the lesser (i) any
excess of the fair market value of the shares at the time of exercise of
the option over the exercise price or (ii) the actual gain on
disposition will be treated as compensation to the optionee and will be
taxed as ordinary income in the year of such disposition.
5. In any year that an optionee recognizes compensation income
on a disqualifying disposition of stock by exercising an ISO, the
Company will generally be entitled to a corresponding deduction for
income tax purposes (this generally does not apply to capital gains
received by the optionee).
6. The aggregate fair market value of Common Stock that can be
acquired for the first time in a year by an optionee exercising an ISO
cannot exceed $100,000, and otherwise, such options will not be treated
as ISOs. The aggregate fair market value of Common Stock for which an
ISO is exercisable is determined at the time of the option's grant.
(b) Non-Statutory Stock Options. A non-statutory stock option granted
under the 1995 Plan is taxed accordance with Section 83 of the Code and
the regulations issued thereunder. The following general rules are
applicable to holders of such options and to the Company for Federal
income tax purposes under existing law, based upon the assumptions that
(i) the options do not have a readily ascertainable fair market value at
the date of grant, and (ii) the Common Stock acquired by exercising the
non-qualified stock option is either transferable or not subject to a
substantial risk of forfeiture (as defined in Regulations under Section
83 of the Code):
1. The optionee does not realize any taxable income upon the
grant of an option, and the Company is not allowed a business expense
deduction by reason of such grant.
2. The optionee will recognize ordinary compensation income at
the time of exercise of the option or at the time of the transfer of the
option prior to exercise in an amount equal to the excess, if any, of
the fair market value of the shares of Common Stock on the date of
exercise over the exercise price.
3. Except as provided in paragraph (b)(2) above, when the
optionee sells the shares of Common Stock issued upon exercise of
options, he will recognize a capital gain or loss in an amount equal to
the difference between the amount realized upon the sale of such shares
an this basis in such shares (i.e., the exercise price plus the amount
deemed received by the optionee as compensation income). If the
optionee holds the shares for longer than the statutory holding period,
this gain or loss will be a long-term capital gain or loss.
4. In general, the Company will be entitled to a tax deduction
in the year in which compensation income is recognized by the optionee
(this generally does not apply to capital gains received by the
optionee).
(c) ERISA. The 1995 Plan is not an employee benefit plan which is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 and the provisions of Section 401(a) of the Code are not
applicable to the 1995 Plan.
STOCKHOLDER PROPOSALS
Proposals by stockholders intended for inclusion in the proxy statement
to be mailed to all stockholders entitled to vote at the next annual
meeting of the Company must be received by the Company or its principal
executive officers no later than April 1, 1996. The Company will only
include proposals by stockholders who meet the eligibility requirements
described in Rule 14a-8 (a)(1) under the Securities Exchange Act of
1934.
COST OF SOLICITATION
The cost of soliciting proxies on the accompanying proxy form will be
borne by the Company. In addition to solicitation by mail, the Company
will request banks, brokers and other custodians, nominees and
fiduciaries to send proxy material to the beneficial owners and to
secure their voting instructions, if necessary. The Company will
reimburse them for their reasonable expenses in so doing. Directors,
officers and regular employees of the Company may solicit proxies
personally, by telephone and by telegram from stockholders if proxies
are not received promptly.
GENERAL
The Board of Directors knows of no business that will be presented for
action at the Annual Meeting in addition to the matters specified in the
accompanying Notice of Annual Meeting. If other matters do come before
the Annual Meeting, it is intended that proxies will be voted in
accordance with the judgment of the person or persons exercising at the
Annual Meeting the authority conferred by the proxy.
It is important that proxies be returned promptly. Therefore,
stockholders are requested to complete, sign and date the accompanying
proxies and to return them properly in the enclosed envelope.
NEW YORK, NEW YORK BY ORDER OF THE BOARD OF DIRECTORS
APRIL 26, 1995
RANDOLPH J. MITTASCH
SECRETARY AND TREASURER
EXHIBIT I
PROPOSED AMENDMENT TO
THE COMPANY'S
CERTIFICATE OF INCORPORATION
WITH RESPECT TO DIRECTORS
RESOLVED, that a new ARTICLE TWELFTH shall be added to the Company's
Certificate of Incorporation that shall read in its entirety as follows:
12. Directors shall be divided into three classes, Class I,
Class II and Class III. The Board of Directors of the Company shall
determine into which class each director or nominee is assigned. Each
class shall consist of the same number of directors; provided, however
that (i) if the directors cannot be divided evenly into three classes,
Class III shall consist of one fewer director than Class I and II, and
(ii) if there are fewer than five directors, Class I shall consist of
one more director than Classes II and III. The members of each class
shall be elected for three year terms and until their successors are
elected and shall have qualified; provided however, that the first
directors to be assigned to Class II initially shall be elected for a
term of two years and the first director or directors to be assigned to
Class III initially shall be elected for a term of one year. The
provisions of this Article TWELVE cannot be amended without the
affirmative vote of the holders of more than two-thirds of the shares of
Common Stock present at a meeting in person or represented by proxy,
provided that a quorum is present thereat.
EXHIBIT II
PROPOSED AMENDMENT
TO THE
COMPANY'S CERTIFICATE OF INCORPORATION
WITH RESPECT TO THE
COMPANY'S PREFERRED STOCK
RESOLVED, that the paragraph in ARTICLE FOURTH of the Company's
Certificate of Incorporation that describes the Preferred Stock shall be
amended in its entirety to read as follows:
The Board of Directors is hereby authorized to provide for the
issuance of Preferred Stock from time to time in one or more series with
such distinctive serial voting powers, designations, preferences,
rights, qualifications, limitations, and restrictions of the shares of
each such series as the Board of Directors with respect to each such
series shall determine, which shall include, without limiting the
generality of the foregoing, the determination of any or all of the
following:
(i) the number of shares constituting such series, the par value
and the distinctive designation of such series;
(ii) the extent, if any, to which the shares of such series shall
have voting rights;
(iii) whether dividends, if any, with respect to such series shall
be cumulative or noncumulative, the dividend rate or method or
determining the dividend rate of such series, and the dates and
preferences of dividends on such series;
(iv) the rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation, or upon any distribution of the Corporation's assets;
(v) whether the shares of such series shall have conversion
privileges and, if so, the terms and conditions of such conversion
privileges, including a provision, if any, for adjustment of the
conversion rate and for payment of additional amounts by holders of
Preferred Stock of such series upon exercise of such conversion
privileges;
(vi) whether or not the shares of such series shall be
redeemable, and, if so, the price at and the terms and conditions upon
which such shares shall be redeemable, and whether such series shall
have a sinking fund for the redemption or purchase of shares of such
series, and, if so, the terms and amount of such sinking fund; and
(vii) any other preference and relative, participating, optional,
or other special rights, and qualifications, limitations, or
restrictions thereof.
The powers, designations, preferences, rights, qualifications,
limitations and restrictions of the Preferred Stock shall be determined
from time to time by the Board of Directors and shall be stated in a
resolution or resolutions thereof providing for the issuance of such
Preferred Stock (a "Preferred Stock Designation").
Except as may be provided by the Board of Directors in a Preferred
Stock Designation or by law, shares of any series of Preferred Stock
that have been redeemed (whether through the operation of a sinking fund
or otherwise) or purchased by the Corporation, or which, if convertible
or exchangeable, have been converted into or exchanged for shares of
stock of any other class or classes, shall have the status of authorized
and unissued shares of Preferred Stock and may be reissued as a part of
the series of which they were originally a part or may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors or as part of any other series of
Preferred Stock.
PROXY
THE CARE GROUP, INC.
1 HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Ann T. Mittasch, Gilda G. Schechter and
Randolph J, Mittasch and each of them, proxies, with full power of
substitution, to vote the shares of common stock of The Care Group, Inc.
(the "Company") which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held on June 21, 1995, and any
adjournments thereof, on the matters set forth in the Notice of Meeting
and Proxy Statement dated April 26, 1995, as follows:
1. Proposal to amend the Certificate of Incorporation of the Company
to create three classes of directors (classes I, II and III).
( ) For ( ) Against ( ) Abstain
2. Election of directors (check one box only):
( ) For all nominees listed below.
( ) Withhold authority to vote for all nominees listed below.
Class I: Ann T. Mittasch
Randolph J. Mittasch
Class II Gilda G. Schechter
John J. Lynch
Class III Dr. Alex Maurillo
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW)
____________________________
Note: If Proposal 1 does not pass, the directors will not be elected in
separate classes but rather will be elected for the term ending at the
next annual meeting and until their successors are elected and shall
have qualify.
3. Proposal to amend the Certificate of Incorporation of the Company
to clarify the Board of Director's discretion to determine the powers,
rights and preferences of the Company's Preferred Stock.
( ) For ( ) Against ( ) Abstain
4. Proposal to select Deloitte & Touche, LLP as the independent
public accountants of the Company for the year ended December 31, 1995.
( ) For ( ) Against ( ) Abstain
5. Proposal to approve the Company's 1995 Stock Option Plan.
( ) For ( ) Against ( ) Abstain
In their discretion, the Proxies are authorized to vote (i) on such
other matters as may properly come before the meeting or any such
adjournments thereof and (ii) for the election of any person as a
director of the Company replacing a nominee named in the proxy statement
if such named nominee is unable to serve or for good cause will not
serve.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, AND 5.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in full partnership
name by authorized person.
DATED:__________________, 1995 ________________________
Signature
________________________________________
: PLEASE MARK, SIGN, DATE AND : ________________________
: RETURN THE PROXY CARD PROMPTLY: Signature if held jointly
: USING THE ENCLOSED ENVELOPE :
2.
mari-cwh\caregrp\proxy
THE CARE GROUP, INC.
1995
STOCK OPTION PLAN
SECTION I
NATURE AND PURPOSE
This Plan shall be known as "The Care Group, Inc. 1995 Stock Option
Plan." This Plan permits the grant of both (i) options intended to
qualify as incentive stock options ("ISOs") under Section 422 of the
Internal Revenue Code of 1986 (the "Code"), and (ii) nonstatutory
restricted stock options ("ROs"). This Plan is designed to encourage
certain highly talented officers, directors, employees and consultants
of The Care Group, Inc. (the "Company") and its subsidiaries to help
build the Company and its subsidiaries into a strong, profitable and
growing business. This Plan is in addition to the Company's 1990 Stock
Option Plan, 1991 Stock Option Plan and 1993 Stock Incentive Plan.
SECTION II
GRANT OF OPTIONS
1. Grant of Options. The Board of Directors of the Company is empowered
from time to time to grant (i) ISOs to one or more officers or key
employees of the Company or any of its subsidiaries and (ii) ROs to one
or more of the officers, directors, employees, consultants, advisers or
affiliates of the Company or any of its subsidiaries (ISOs and ROs are
hereinafter collectively referred to as "Company Options" and,
individually, as a "Company Option"). A total of one million (1,000,000)
Company Options may be granted under this Plan. Each Company Option
shall be expressly designated as an ISO or RO.
2. Exercise of Company Options.
(a) Each Company Option is exercisable for one (1) share of Common
Stock, par value $.001 per share, of the Company (the "Common Stock"),
subject to adjustment as provided below (the share of Common Stock
subject to each Company Option is sometimes hereinafter referred to as a
"Company Option Share," and all such shares are hereinafter sometimes
collectively referred to as the "Company Option Shares"; the share of
Common Stock subject to an ISO is sometimes hereinafter referred to as
an "ISO Share," and all such shares are sometimes hereinafter referred
to as the "ISO Shares"; the share of Common Stock subject to an RO is
sometimes hereinafter referred to as an "RO Share," and all such shares
are sometimes hereinafter referred to as the "RO Shares").
(b) Subject to Paragraph 4 of this Section II, each Company Option
(other than an ISO granted to a "Significant Stockholder" (hereinafter
defined)) may be exercised by an optionee upon ten days prior written
notice to the Company at any time during the period commencing upon the
date of grant of such option and expiring on December 31, 2004. At 11:59
p.m. on December 31, 2004, each Company Option (other than an ISO
granted to a Significant Stockholder) will expire. Each ISO granted to a
Significant Stockholder at the date of grant will expire 5 years after
date of grant. Each Company Option shall be nontransferrable by the
optionee to whom it is granted and, except as provided in Subparagraph
4(c) of this Section II, shall be exercisable only by such optionee.
3. Purchase Price of Company Options.
(a) The purchase price of each RO Share shall be at least ninety
percent of the per share fair market value of the Common Stock on the
date of grant (as determined pursuant to paragraph 3(c)).
(b) The purchase price of each ISO Share shall be the fair market value
per share of Common Stock on the date of grant (as determined pursuant
to paragraph 3(c)). In the case of an ISO to be granted to a person
owning stock possessing more than ten percent of the total combined
voting power of all classes of the stock of the Company and all of its
subsidiaries (a "Significant Stockholder"), the purchase price of the
ISO share subject to such option shall be 110% of the fair market value
of the Common Stock on the date of grant (as determined pursuant to
paragraph 3(c)). In no event shall the aggregate fair market value
(determined at the time the option is granted) of Common Stock for which
ISOs granted to any employee are exercisable for the first time by such
employee during any calendar year (under all stock option plans of the
Company and all its subsidiaries) exceed $100,000.
(c) For the purpose of this paragraph 3(b), the "fair market value" of
the Common Stock "on the date of grant" shall be determined as of the
last business day for which the prices or quotes of the Common Stock are
available prior to such date of grant and shall mean (i) the closing bid
price (or average of bid prices) last quoted (on the date) by an
established quotation service for over-the-counter securities, if the
Common Stock is reported on neither the NASDAQ National Market System
("NMS") nor a national securities exchange; or (ii) the last reported
sale price (on the date) of the Common Stock on the NMS, if the Common
Stock is then traded on the NMS but not on a national securities
exchange; or (iii) the average (on the date) of the high and low prices
of the Common Stock on the principal national securities exchange, if
the Common Stock is traded on a national securities exchange. However,
if the Common Stock is not publicly traded at the time a Company Option
is granted under this Plan, "fair market value" shall be deemed to be
the fair value of the Common Stock as determined by the Company's Board
of Directors after taking into consideration all factors which the Board
of Directors deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.
4. Early Expiration of Options.
(a) If an optionee ceases to be employed or affiliated with the Company
such that he is no longer an officer, director, employee, adviser,
consultant or affiliate thereof prior to expiration of his Company
Options other than by Disability (hereinafter defined), death or for
Cause (hereinafter defined), his Company Options, if then exercisable,
may be exercised by the optionee only within three months after the date
that his employment or affiliation with the Company ceases (but in no
event may his Company Options be exercised beyond December 31, 2004);
provided, however, that if the optionee dies within such three-month
period the provisions of subparagraph (c) of this paragraph 4 shall
govern. A leave of absence for less than 90 days or where the optionee's
return to employment is guaranteed by contract or statute is not deemed
a termination of employment.
(b) If an optionee ceases to be employed or affiliated with the Company
such that he is no longer an officer, director, employee, adviser,
consultant or affiliate thereof prior to the expiration of his Company
Options by Disability, his Company Options, if then exercisable, may be
exercised by the optionee only within one year after the date of such
Disability (but in no event later than December 31, 2004); provided,
however, that if the optionee dies within such one year period the
provisions of subparagraph (c) of this paragraph 4 shall govern.
(c) In the event of the death of an optionee prior to the expiration of
his Company Options, his Company Options, if then exercisable, may be
exercised by his estate, personal representative or beneficiaries who
has acquired the Company Option by will or by the laws of descent or
distribution at any time prior to one year following the optionee's
death but no later than December 31, 2004.
(d) If an optionee ceases to be either an officer, director or employee
of the Company for Cause prior to expiration of his Company Options,
then each of his then outstanding Company Options shall, upon his so
ceasing to be an officer, director or employee, thereupon expire and be
cancelled in full.
(e) As used in this paragraph 5, the following terms shall have the
following meanings:
(i) "Cause": The grossly negligent or otherwise unsatisfactory
performance of the optionee's duties to the Company as an officer,
director or employee thereof, or the optionee's willfully engaging in
either misconduct materially injurious to, or fraudulent conduct
involving, the Company.
(ii) "Disability": The inability of the optionee, due to total and
permanent physical or mental incapacity, to be able to perform
substantially all of the duties and activities to be performed by such
optionee as an officer, director, employee, consultant or agent of the
Company or any of its subsidiaries performed during the six months prior
to such incapacity or illness.
5. Buy-Out. If at any time prior to expiration of the Company Options
the Company approves (i) a definitive agreement to merge or consolidate
the Company with or into another corporation or other business entity
whereby the holders of all of the issued and outstanding shares of
Common Stock immediately prior to the merger or consolidation will,
immediately after the merger or consolidation, hold no more than 60% of
the aggregate value of the capital stock of the surviving entity or (ii)
the sale of at least 50% of the assets of the Company based on fair
value, then the Company may, within seven days after the Company so
approves such definitive agreement or asset sale, purchase any or all of
the then outstanding Company Options with respect to which the optionees
shall not have then exercised (whether or not notice of exercise of any
such Company Options shall then have been delivered pursuant to
subparagraph 2(b)) at a per option price equal to $.10; provided,
however, that (i) if the Company shall purchase less than all then
outstanding Company Options, the Company shall purchase Company Options
from each optionee on a prorated basis in accordance with the number of
Company Options held by each such optionee as such number bears to the
total number of then issued and outstanding Company Options, and (ii)
the Company shall not have the right under this paragraph to purchase
any outstanding ISOs to the extent that the right to effect such
purchases will disqualify the ISOs granted hereunder as "incentive stock
options" under Section 422A of the Code.
6. Reclassification, Reorganization or Merger.
(a) In case of any reclassification, capital reorganization or other
change of outstanding shares of the Common Stock of the Company (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of an issuance of Common Stock
by way of dividend or other distribution or of a subdivision or
combination), or in case of any consolidation or merger of the Company
with or into any corporation or a merger of another corporation with and
into the Company or in case of any sale or conveyance to another
corporation of all or substantially all of the property of the Company
(any of the foregoing transactions hereinafter being referred to as an
"Extraordinary Transaction"), the Company shall cause effective
provision to be made so that each optionee shall have the right
thereafter, upon exercising his Company Options, to receive the kind and
amount of shares of stock and other securities and property receivable
upon such Extraordinary Transaction as if such optionee had exercised
his Company Options immediately prior to such Extraordinary Transaction.
Any such provision shall include provision for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this Plan and Agreement. The foregoing provisions of
this paragraph shall similarly apply to successive reclassifications,
capital reorganizations and changes of shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(b) Notwithstanding the foregoing, any adjustment made pursuant to
paragraph 6(a) with respect to ISOs shall only be made after the Board
of Directors, after consulting with counsel for the Company, determines
whether such adjustments would constitute a "modification" of such ISOs
(as that term is defined in Section 425 of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments.
SECTION III
PROVISIONS GOVERNING
THE GRANT OF ISOs
Notwithstanding anything to the contrary contained herein, each ISO and
each ISO Share subject thereto shall be subject to the following terms
and conditions:
1. No ISO optionee can transfer, sell, pledge, hypothecate, gift or
otherwise dispose of an ISO Share until the expiration of both (i) two
years after the date of grant of the ISO pursuant to which such ISO
Share was issued, and (ii) one year after the optionee acquires the ISO
Share. Provided, however, that the foregoing sentence does not apply to
ISOs that are exercised after the death of the ISO optionee.
2. A Company Option shall be treated as an ISO only if the optionee, at
all times during the period beginning on the date of the granting of the
option and ending on the day 3 months before the date of exercise of the
option, was an employee of either the Company, a subsidiary or parent of
the Company, or a company (or a parent or subsidiary of such company)
issuing or assuming such Company Option.
3. The Company's Board of Directors, at the written request of any ISO
optionee, may in its discretion take such actions as may be necessary to
convert such optionee's ISOs that have not been exercised on the date of
conversion into ROs at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company or a
subsidiary thereof at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such
Options. At the time of such conversion, the Committee (with the consent
of the optionee) may impose such conditions on the exercise of the
resulting ROs as the Company's Board of Directors in its discretion may
determine, provided that such conditions shall not be inconsistent with
this Plan. Nothing in the Plan shall be deemed to give any ISO optionee
the right to have such option's ISO converted into ROs, and no such
conversion shall occur until and unless the Board of Directors take
appropriate action. The Company's Board of Directors, with the consent
of the optionee, may also terminate any portion of any ISO that has not
been exercised at the time of such termination.
4. In order for the Company to issue any ISOs, this Plan must receive
the approval of the holders of a majority of the Company's Common Stock.
SECTION IV
ERISA; CERTIFICATES;
AMENDMENT OF PLAN; RESERVATION OF SHARES
1. ERISA and Federal Income Taxes. This Plan and Agreement is not
subject to the Employee Retirement Income Security Act of 1974, nor is
this Plan and Agreement qualified under Section 401(a) or the Internal
Revenue Code of 1954, as amended.
2. Certificates. The Company Options granted hereunder will be
represented by certificates. Upon the exercise of any Company Option the
optionee will submit the certificate representing such option to the
Company at its principal executive offices, and if the exercise is for a
portion of such optionee's Company Options, a new certificate will be
issued to the optionee by the Company representing the remainder of such
optionee's unexercised Company Options.
3. Amendment to the Plan. It is understood that the Board of Directors
of the Company may from time to time amend this Plan except that if any
such amendment shall adversely affect any optionee under this Plan or
require stockholder vote, such amendment must be consented to in writing
by such optionee or approved by the Company's stockholders, as the case
may be. Provided, however, that the Company may, without receiving the
written consent of any optionee, amend this Plan to permit any or all
transactions to be effectuated under this Plan to be exempt from the
operation of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), pursuant to Rule 16b-3 under the Exchange
Act or any successor law, rule or regulation thereof. The Board of
Directors may either modify any of the terms of any or all of the
Company Options after they are granted or terminated and reissue any or
all Company Options that may be outstanding from time to time. The Board
of Directors may in its discretion assign and delegate all
responsibilities for administering this Plan and granting Company
Options to a compensation committee of the Board of Directors, and such
assignment and delegation shall not require the consent of any optionee.
Nothing in this Plan shall in any way limit or restrict the Company's
right or ability to establish any other compensation, incentive,
pension, stock option or similar plans or programs or to issue shares of
the Company's securities to any person or entity for any reason
whatsoever.
4. Reservation of Shares. The Company agrees that at all times there
shall be reserved for issuance upon exercise of the Company Options
granted hereby a sufficient number of shares of Common Stock and/or
other securities as shall be required for such issuance.
SECTION IV
ASSIGNMENTS; INVESTMENT INTENTION
1. Assignment and Successors and Assigns. The terms of this Plan shall
bind and inure to the benefit of the respective heirs, appointees,
assigns, executors, administrators and successors of the respective
parties hereto but shall not be assignable by any optionee without the
Company's affirmative consent, except as otherwise expressly provided in
any other section of this Plan.
2. Investment Intention. Each optionee hereby represents, warrants,
covenants and agrees that he is acquiring the Company Options hereunder,
and that upon exercise of such options he will be purchasing the Company
Option Shares, for investment and not with intention of distribution or
resale and that the Company Options and Company Option Shares may not be
offered or sold except in compliance with the provisions of the
Securities Act of 1933, as amended.
SECTION V
MISCELLANEOUS
1. Notices.
(a) Any notice which any party hereto may be required or permitted to
give shall be in writing, or may
be delivered personally or by mail, postage prepaid, or telegram,
telecopy or telex, addressed as follows: to the Company, at 1 Hollow
Lane, Lake Success, New York 11042, or at such other address as the
Company, by written notice to the optionees, may designate from time to
time; to each optionee, at the last address contained in the Company's
records for the optionee or at such other address as the optionee, by
written notice to the Company, may designate from time to time.
2. No Implied Right of Employment. The selection of an optionee for
participation in this Plan shall not ipso facto give the optionee any
rights to serve as a director, officer or employee of the Company or any
subsidiary.
3. No Contingent Voting Rights. An optionee shall have no voting or
other rights with respect to any Company Option Shares until
certificates representing such Company Option Shares shall actually have
been delivered to him following his exercise of the corresponding
Company Options.
4. Other Benefits. The benefits provided for the optionees under this
Plan and Agreement shall be in addition to and shall in no way preclude
other benefits or forms of compensation from the Company to the
optionees.
5. Governing Law. This Plan shall be construed in accordance with the
substantive laws of the State of New York without regard to its conflict
of law doctrine.
6. Consolidation Clause; Survival. This Plan contains the entire
understanding of the parties with respect to its subject matter. All
representations, warranties, covenants and agreements made herein shall
survive the execution of this Plan.
7. Effective Date of Plan. This Plan was approved by the Company's Board
of Directors as of April 6, 1995.
1524A
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